The U.S. House of Representatives and Senate have agreed to jointly design a plan that would increase the minimum wage without starting inflation, an action that has followed each increase in the past. Much of the high, runaway inflation of the Jimmy Carter presidency can be directly linked to his increasing minimum wage five times in his four year term.
The Congress is considering the following plans to increase the minimum wage:
1. TIe minimum wage into the price of gasoline. The current national average for a price of regular unleaded gas is slightly over $3.00 a gallon. In this plan, minimum wage would be set at twice the price of a gallon of gas, or just over $6.00 an hour. When gas goes up, minimum wage goes up. When gas goes down, minimum wage would drop correspondingly. As most employees at gas stations and convenience stores make at or near the minimum wage mark, this would force distributors to try and control the price.
2. In a similar idea, the minimum wage would be tied in to the price of a movie ticket. The plan states that an average worker should be able to see a movie for the amount of money that they make in an hour. Ticket prices vary in different markets and are currently higher than the minimum wage in most parts of the country. The plan would start by setting a federally mandated rate for movie tickets and matching that to the minimum wage.
3. Another idea that bears striking similarity to the first two involves fast food restaurants. The joint commitee investigating the low salary problem feels that a minimum wage worker should be able to buy a burger, fries, and drink or sandwich, chips, and drink for the amount of money that they make in an hour. Their official report stated that "an employee should not have to work more than an hour to buy their lunch. The price of a fast food lunch should equal the amount of their take home pay (after taxes) within that hour." As most of the fast food industry pays minimum wage, this would greatly affect how they pay their employees.
4. A fourth plan would tie minimum wage into the employee's age. A base rate of $4.00 would be set and workers would receive $.05 cents per hour for each year of age above 16. In other words, a 20 year old would make $4.20 per hour (lower than the current rate), but a 20 year old would make $5.20 per hour (right at the current rate). This plan would benefit the older worker who is dependant on the income for their livelyhood rather than the young kid just earning play and date money.
5. Congress has a fifth plan that would match minimum wage to the inflation rate. When the rate increases by 2%, minimum wage would raise correspondly. To save on paperwork, adjustments to the minimum wage would be calculated and made quarterly. The idea here is to keep the buying power of the minimum wage worker the same.
6. Another plan under consideration would abolish minimum wage entirely and return us to the apprentice/journeyman/master system of the past. The master (manager, business owner) would then be responsible for seeing that his apprentices (employees) received basic food and housing in exchange for his teaching them their trade.
7. A popular plan within Congress would require states to set their own minimum wage based on the economy within the state. This would have the benefit of taking the blame for inflation off of the federal government.
8. A plan that would require much regulation, and therefore a somewhat unpopular idea, would be to tie salary in to productivity. A federal minimum would be set and the most productive workers would earn more than the "clock milkers." Some labor unions oppose this plan as they feel that minimum wage is an entitlement and should not require productivity.
9. The individual contract plan would allow the employee and employer to decide and agree on a salary and benefits before work is started. This plan is said to have the benefit of stimulating a more free market economy and rewarding higher producers. After the term of the initial contract expires, the employee could either renegotioate at a higher or lower rate, be "cut" by the employer, or become a "free agent" and seek a new employer, using his previous successes as a guide to his productivity and work ethic. A salary cap would be set in each business to keep some companys from having all of the "best" employees. This plan has worked successfully in the NFL.
In the past, any change to the federal minimum wage has caused a corresponding price increase to all goods and services that has actually lowered the buying power of all workers in the country. Congressmen wish to avoid this happening as a result of their changing the minimum wage as they all wish for reelection. Political watch groups feel that the Republicans may have been swept into power in 1981 not due to the ineffectual handling of the Iran Hostage Crisis by Jimmy Carter, but by the runaway inflation caused by his proposing and Congress increasing the minimum wage several times.
Current Senators and Representatives recognize that the minimum wage worker must be compensated properly, but not at the expense of their own jobs.